Dividend Growth Investing is great long term strategy for building a nest egg. DGI for short, Dividend Growth Investing involves investing in mostly blue chip dividend paying companies. You would then reinvest those dividend into more shares of blue chips.
What is Dividend Growth Investing?
Dividend Growth Investing is a long term investing strategy focusing on building and accumulating long term wealth. Dividend Growth Investing is perfect for developing passive income and creating portfolio diversity. Reinvesting the passive income earned is one of the most important steps of this strategy. By continuing to accumulate shares, you are also increasing your monthly or quarterly dividend amounts.
How to Start
The easiest way to start your journey towards building a DGI portfolio is to use a simple trading app such as Robinhood or Webull. Robinhood is simple and easy to use for new traders. I would start with a small amount and add a smaller amount of money on a monthly basis. Make sure this amount is expendable as you want to leave your money invested for the long run.
Tip: I personally think Robinhood is the best app for stock trading due to its easy to use interface.
Top Dividend Stocks in My Portfolio
My current dividend growth portfolio started several months ago. This account is separate from my active trading account and I plan on holding these stocks for the next decade.
1.Exon Mobile (XOM)
Exon Mobile is one of the larger oil and gas companies. With a current dividend of somewhere between 6-7% (this might fluctuate due to Covid-19) and a beaten down share price, I am confident Exon Mobile will rebound and continue to payout solid dividends in the post-covid era. I think the energy sector, particularly the oil industry is intruiging due to their beaten down prices, high potential for recovery, and solid dividends.
Another Oil company, BP’s share price has also taken a fit in the last several months due to stay at home orders. The company’s current dividend is about 9%. Similar to Exon Mobile, I think BP provides good value with their dividend and will most likely see their share price recover to pre-covid levels.
3.Wells Fargo Bank (WFC)
Just like many other sectors, the banking industry was also hard hit by the pandemic. Many bank stocks fell nearly 50%. Wells Fargo Bank is currently about 20% of my overall holdings and pays a sweet dividend of around 5-6%. For the last payment, the dividend amount (.51 per share) was almost 9% due to the low stock price. I will continue to look at the banking industry for other attractive dividend options.
4.International Business Machines (IBM)
A rarity in the tech sector, IBM is one of the few tech companies that pay an attractive dividend. The current dividend yield is around 5% and with the stock price down 40% from all time highs during the time of purchase, I would certainly like to increase my holding in the company. I think IBM’s stock price will eventually retouch their all time highs.
While I have also invested in American Airlines(AAL), Spirit Airlines(SAVE), and Jet Blue(JBLU), I recently decided to open a small stake with Delta Airlines. I strongly believe that airlines will eventually fully recover from the pandemic. All airlines are extremely attractive, but I believe Delta Airlines will eventually be the top U.S. Airline due to their ongoing improvements with customer experience. It is also important to note that prior to suspending their dividends, Delta’s dividend payout was roughly 5%.
How to get Started
Stock trading and investing has come a long way in the last decade. Nearly all brokers now offer commission free trading. For a beginner, I would definitely start using Robinhood or Webull.
Here is Robinhood link is you would like to support me: Robinhood